Some contracts restrict police from doing things like lengthening the yellow signal and leave taxpayers holding the bag if the contracts are terminated early, says the report from the U.S. Public Interest Research Group, the federation of state public interest research groups.

"The most problematic contracts require cities to share revenue with the camera vendor on a per-ticket basis or through other formulas as a percentage of revenue," the group says. "In other words, the more tickets a camera system issues, the more profit the vendor collects."

"It just creates this really broad incentive to fine as many people as you can," says Phineas Baxandall, a co-author of the report. "That's not a good safety model."

About 700 communities in about half the states have deals with for-profit companies to install camera systems. The trend has been accelerated during the recession as local governments seek revenue that can help them avert laying off teachers, firefighters and police officers, the report says.

The deals "sometimes prevent local governments from acting in the best interests of their citizens, especially when the terms of the deal prioritize delivering profits for the shareholders or owners of the private firm," the report says. When local governments privatize traffic enforcement, they usually retain some role. Some contracts, though, limit government powers to set and enforce traffic regulations.

Yellow-light duration, for example, has long been a contentious point in the red-light camera debate.

Lengthening a yellow signal gives drivers more time to react to a signal change, thus reducing the number of red-light violations.

"However, some contracts potentially impose financial penalties on the city if traffic engineers extend the length of the yellow light at intersections, which would reduce the number of tickets the systems can issue," the report says.

Anne McCartt, senior vice president for research at the Insurance Institute for Highway Safety and a proponent of automated enforcement, says cameras "are a highly effective way to reduce red-light running and reduce crashes, especially serious crashes, at intersections. … The most effective program would be one where no tickets would be issued because no one is running a red light."

The privatized traffic law enforcement industry "has amassed significant political clout that it uses to shape traffic safety nationwide," according to the report, which says vendors aggressively lobby to expand camera use. "In 2011, camera vendors employed nearly 40 lobbyists in Florida, whose agenda included killing a bill that would have required municipalities to adopt longer yellow-light times to increase intersection safety," the report says.

"This report is going to open a whole new, robust dialogue about how we should both provide public safety by using photo enforcement and about how it should be managed to protect the public interest," says Leslie Blakey, executive director of the National Campaign to Stop Red Light Running, an advocacy group initially funded by the photo enforcement industry.